What is SaaS? Everything you need to know

What is SaaS? Everything you need to know

Learn why SaaS is revolutionizing the software industry. Change your service provider approach and discover the benefits of SaaS architecture.

What is SaaS? Everything you need to know

Learn why SaaS is revolutionizing the software industry. Change your service provider approach and discover the benefits of SaaS architecture.

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Written by
Webflow Team

SaaS applications revolutionize how companies provide services and users engage with software.

Short for "Software as a Service," SaaS sidesteps traditional software processes that involve cumbersome downloads, installations, and updates. Instead of relying on localized client servers, this software framework uses cloud computing to provide instant access, automatic updates, and secure data storage.

Whether you're a student or an experienced professional, these applications make technology more accessible and intuitive. Here’s everything you need to know about SaaS.

The shift toward SaaS

Before the ’90s dot-com boom, the client-server model dominated the software industry, requiring businesses to purchase and use applications on local devices and client servers. This approach saved storage but relied heavily on sending data to a central server over the internet. Growing demand for efficient, centralized software access highlighted the limitations of the client-server model, eventually giving rise to Application Service Providers (ASPs). ASPs served as an early iteration of SaaS by bridging the gap between traditional software usage and centralized access, allowing users to operate software without local installation and maintenance.

The late ’90s and early 2000s saw the internet’s widespread adoption redefine software delivery, propelling online transactions, marketplaces, and cloud computing to mainstream prominence. Companies like Salesforce took the lead, licensing enterprise software through browsers without requiring individual installations.

Businesses quickly recognized the benefits of SaaS; centralized updates allowed providers to implement changes in one central location without requiring users to update their software versions themselves. This feature, alongside scalable infrastructure, a subscription-based revenue model, and the ability to offer software access from any internet-connected device, skyrocketed SaaS adoption rates across industries. Later advancements in internet technology — faster broadband speeds and enhanced data encryption — bolstered SaaS offerings further and underscored the limitations of traditional software delivery methods. Grasping the full impact of the SaaS revolution, however, requires understanding its architecture and functionality.

How SaaS applications work

SaaS applications live online — they don’t require software installations or individual device updates. Software providers shoulder these responsibilities, hosting applications on their servers or collaborating with third-party hosting services or Platform as a Service (PaaS) companies. This setup ensures devices remain clutter-free, with software and application data residing in the cloud. Cloud computing seamlessly delivers updates, eliminates manual installations to save time, reduces operational costs, and ensures users always have the latest features and security patches. 

Imagine needing a word processor for your small business documents. Instead of downloading a program from the internet and going through a cumbersome installation process, SaaS applications give you access to this software directly from your browser. This modern approach saves time, making software access more efficient and hassle-free.

The basics of SaaS architecture

SaaS caters to diverse industry needs and audiences with its multi-tenant architecture, where a centralized unit actively manages vast end-user networks. As demand for services like marketing, customer relationship management (CRM), and accounting rise, SaaS leverages horizontal scaling, adding servers to distribute growing user demands for responsiveness and stability. This diffused approach ensures no single server becomes a bottleneck, preventing slowdowns and service interruptions. 

SaaS also uses vertical scaling, optimizing server resources to enhance performance and capacity. Instead of adding more servers, as with horizontal scaling, vertical scaling maximizes the capabilities of existing infrastructure and resources to handle more complex tasks or larger data sets. This approach customizes solutions to meet the unique demands of specialized sectors. For example, vertical scaling optimizes specific server resources to handle complex data processing for healthcare systems, like patient records and medical imaging, or to support the interactive and multimedia-heavy components of Educational Technology (EdTech) platforms.

Together, horizontal and vertical SaaS architectures empower service providers to meet general and niche demands efficiently.

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The 3 main advantages of SaaS

SaaS offers more than a new approach for software delivery — it transforms how people and organizations engage with technology. SaaS benefits the digital world by bolstering security, improving accessibility, and saving money.

1. Security

Nearly two-thirds of financial service companies allow staff access to over 1,000 confidential documents, while 59% of employees use passwords that never expire. These behaviors put them at risk of brute-force attacks, where hackers try various password combinations until they find the right one, leading to unauthorized access and data breaches.

SaaS applications counter these vulnerabilities by incorporating advanced password protocols, ensuring users choose hard-to-crack passwords that use a mix of uppercase and lowercase letters, numbers, and special symbols. They also demand regular password updates, minimizing prolonged unauthorized access, even if passwords are compromised. Tech giants and services like Google Workspace (formerly Google G Suite), Microsoft, and Amazon Web Services mandate these protocols in their ecosystem of SaaS apps, setting industry security standards.

SaaS platforms also deliver frequent, automated updates. Instead of relying on users to manually install security patches, these platforms push timely updates to proactively defend against new threats. This centralized approach to security leaves fewer gaps for cyber threats to exploit, giving businesses and their clients enhanced peace of mind. 

However, this security model isn’t foolproof — centralized system flaws can expose all users to risks, necessitating transparent, ongoing security efforts and prompt action during breaches to maintain user trust and protect crucial data.

2. Accessibility

SaaS architecture allows seamless access to enterprise software from any internet-connected device, regardless of the operating system. After obtaining the necessary permissions, users can access any SaaS application on multiple devices, avoiding unnecessary installations and allowing platform engagement from any location.

Another advantage SaaS holds over conventional software is its advanced data analytics capabilities. Unlike traditional setups, where software operates individually on localized devices, SaaS applications run centrally on the cloud, with every user accessing the same updated version. This strategy ensures consistency and streamlines data collection and analytics from various devices and locations into one platform. 

These detailed insights, gleaned from customer behaviors, patterns, and preferences, empower companies to optimize their applications, improving the user experience and operational efficiency. For example, SaaS companies can analyze user navigation and pain points to streamline workflows and redesign features to provide a more intuitive and efficient product experience.

3. Cost savings

With their subscription-based pricing model, SaaS applications let users choose from flexible weekly, monthly, or yearly subscriptions instead of making large upfront payments.. This pricing model democratizes access, allowing smaller enterprises, freelancers, and independent contractors to use top-tier SaaS products without heavy initial investment. The web-based nature of SaaS amplifies this advantage, eliminating hardware investment requirements. Subscription pricing also helps organizations predict software expenditures, allowing them to plan budgets before software updates or new releases.

Since SaaS companies handle their products' maintenance, updates, and security, businesses using their software also don’t need extensive IT departments to troubleshoot software issues. As a result, they can redirect their resources elsewhere, saving on hardware and IT personnel costs. 

Beyond savings on hardware and maintenance, SaaS also enhances remote collaboration capabilities, negating the need for physical office spaces and reducing training and onboarding expenses. 

Unlock endless possibilities with SaaS

SaaS innovations offer efficiency, collaboration, and scalability. Its transformative benefits extend not just to industry giants but also to small enterprises and individual entrepreneurs, emphasizing cost-efficiency and democratizing access to advanced technology capabilities.

Whether you're a startup or a leader in your field, the Webflow blog has many guides to help you market your SaaS applications and monitor your company's growth

Last Updated
September 12, 2023